While COVID-19 has led many consumers to window shop as a form of escapism, converting these shoppers to purchasers who not only fill their carts but empty them is another story. “Shopping cart abandonment is a crisis,” says Celiena Adcock, head of GTM and Global Business Marketing at Honey, an online shopping platform that saves consumers time and money through loyalty and deal finding. That concern, she notes, was underscored by the results of a study conducted for Honey, a PayPal service, by 4Media Research in September1. The study showed that nearly half of respondents said they sometimes or often put items in a cart but never purchase them. Despite their good intentions, 50% of respondents said they have left carts abandoned for as long as a month.
“Abandoned carts have always been a huge issue for e-commerce,” says digital marketing entrepreneur Neil Patel. “But it’s a bigger trend these days2.” While people are filling up their carts with merchandise they think they might want or that they’re afraid might go out of stock, he says, the economic uncertainty that COVID has brought “makes them more price sensitive right now than they have ever been.”
That price sensitivity, he adds, contributes to what he sees as the answer to pushing those carts through to checkout: deals. And not just because getting something for less money might alleviate the price sensitivity. What deals help create, Patel says, is a “sense of urgency. If you know you already need something, you may not buy it right now, but the moment someone says, ‘Hey, here’s 5% off, 10% off, you’re more likely to take it because you’re getting a better deal.”
This is especially true if the deal is time-based. “The size of the deal is important,” he says, “but we’ve seen that one of the biggest indicators is how long you’re offering that promotion for or how few of those products you can say you’ve got left in stock. Creating that sense of urgency causes people to move and to move faster.” Patel notes that at his advertising agency, NP Digital, “we’re seeing time-based deals impacting the percentage of people who not only add to the cart, but actually purchase—with all of our customers.”
Also critical, Patel says, is that “you change up the deals on a regular basis—different items, different percentages, different promos. All that keeps it fresh. If you keep rotating up your offers and you make them time-based where they don’t last forever, you can see nice impacts in revenue. If you don’t, your competition is going to, and you’ll lose out to them.”
To demonstrate how deals can drive purchases, Patel talks about one of the e-commerce clients his agency advises. In order to spur sales with deals, Patel recommended that the client start working closely with Honey. In the first 30 days, despite an unrelated 4% drop in traffic, the client’s revenue went up by 6%2, thanks to Honey and the enormous user base Honey provides to retailers with which it works.
It’s All About the Base
From Patel’s perspective, the importance of a service like Honey is especially powerful when it comes to new and smaller businesses. “No one really knows about you [a smaller business],” he says. “If you offer a promotion, how are you going to get a ton of sales?” However, he notes, “When you leverage platforms like Honey, they already have a built-in user base. You’re leveraging that base to make more sales.”
But sales are just the beginning, Patel says. When you offer a promotion to Honey’s audience of “ready-right-then-and-there buyers who are just looking for great products and services at a good deal, it’s actually cheaper than it is to pay four, five, 10, or even 15 dollars an [ad] click—especially since when you pay for a click with an ad, there’s no guarantee someone is actually going to buy.” This makes the cost of entry much more affordable for smaller businesses. “When you leverage platforms like Honey that already exist,” Patel says, “you can scale and grow much faster2 without spending all that money. It’s what allows companies of all sizes to compete.”
How Evangelists Help
Add to this the sorts of loyalty programs that Honey offers through Honey Gold3 and you have an irresistible incentive. “When there’s a loyalty program,” Patel explains, “it gives the shopper a reason not to shop around or look for another product, service, or brand.” Moreover, inspired by loyalty rewards, “shoppers become not just loyal, but evangelists. They’re more likely to keep using—and speaking highly of—your product or service2.” The word-of-mouth marketing that creates saves even more on advertising.
More importantly, perhaps, is the extent to which loyalty programs themselves help push shopping carts through to check out. On average, Patel says, “our customers who use loyalty programs are getting more than 20% more completions than those who aren’t2.” And once again, he notes, the loyalty program is likely to have the biggest impact if you’re participating with a loyalty program that has the sort of “massive install base that Honey has.”
So, on the surface, the increase in window shopping fostered by the COVID pandemic may seem to be resulting in fewer conversions and more abandoned shopping carts. But savvy retailers are finding a remedy—the triple whammy of promotions, time-bound deals, and loyalty programs. And savvy shoppers are turning to browser extensions with large user bases, like the one Honey has—which delivers this triple whammy through its Savings Finder, Honey Gold, and Honey Offers programs—in order to find these deals, and act on them.
“COVID’s impact is here for the long run,” says Honey’s Adcock. “So, it’s important to think more about how our dollars can be used to drive benefit across multiple stakeholders. I think that what we’re offering is a great value proposition that makes us all feel good in this crazy time.”
1An online study commissioned by Honey, a part of the PayPal service, conducted by 4Media Research in September 2020. The study researched 2,010 adults in the U.S (general population representative) via on online survey. The overall margin of error of the overall sample is +/-2 percentage points with a confidence interval of 95 percent. The field work took place between September 14th and September 18th, 2020. 4Media is an independent market creative research agency.
2According to internal data reports from Crazy Egg, Ubersuggest, and NP Digital clients from Q3 2020.
3Honey Gold Terms Apply joinhoney.com/terms. Available at select merchants.